BERLIN — If Germany is to quickly revive its flagging industrial economy, businesses say the country’s new leadership must make drastic reductions to bureaucracy alongside their radical plans to boost public investment.

Ten executives and heads of business associations representing industries from cars to energy to shipping said in interviews with Reuters that the cost and complexity of red tape in Germany was draining resources which could otherwise be invested in modernizing their businesses.

Take Ulrich Flatken, head of Mecanindus Vogelsang, a 450-employee company producing cylindrical fasteners for carmakers and other industrial clients.

Mr. Flatken abandoned plans to automate part of his storage facility when he realized that the cost of meeting updated fire regulations for new equipment was so high that he would lose money on the investment.

“I’m not saying I’m a fan of what they’re doing in Argentina or the US — that’s clearly too drastic,” said Mr. Flatken, referring to the sweeping cuts to federal bureaucracy underway in both countries. “But I understand the sentiment… It really bothers me to keep filling out forms without believing that it will achieve anything.”

Calls by executives for the European Union (EU) to loosen and simplify its regulatory framework have grown louder in recent months as businesses grapple with how to compete in the face of an increasingly closed off US market and Chinese firms expanding abroad.

In Germany, top bankers warned last week that to have full effect, the nation’s giant spending plans for infrastructure and defense need to be accompanied by a slashing of red tape.

The regulatory burden was also holding back innovation in Europe’s biggest economy, said Christian Vietmeyer, head of steel and metal association WSM, which represents 5,000 German companies.

In February, the European Commission proposed easing some sustainability reporting rules and has pledged to cut reporting obligations by 25%, rising to 35% for smaller firms, by 2029 — equivalent to a 37.5-billion-euro ($40-billion) reduction in administrative costs.

The conservative CDU party, which won the most votes in Germany’s recent election and is in talks to form a coalition, put cutting red tape in second place on its 15-point list of policy priorities.

But on the ground, executives struggle to trust such promises, fearing governments will simply add new requirements.

Indeed, a World Economic Forum survey of companies in 2023 showed Germany was just one of three countries in the EU where it had become more complex over the previous four years to comply with government regulation.

A 2024 index by German economic institute Ifo measuring the cost of tasks like obtaining permits, filing tax returns, and trading goods found that while other European and OECD countries had eased the burden in recent years, Germany had not: its bureaucracy score has stagnated since 2006.

Adidas chief executive officer Bjorn Gulden said regulatory requirements had gone too far.

“Our ESG reports are 245 pages… We’re spending far too much time documenting instead of doing,” Mr. Gulden said in February. “Bureaucracy stops business.”

‘INSPECTORS FOR EVERYTHING AND NOTHING’
Executives can also be risk-averse, said Gerd Roeders, owner of an aluminum foundry in Lower Saxony.

Mr. Roeders’ company, which employs 168 people, is legally required to have a qualified ladder inspector check his ladders every year for safety and file a report, supported by the original documentation on the ladder’s specifications.

Such systems, while laborious, also protect executives if something goes wrong, Mr. Roeders said.

“We could get rid of the ladder inspector, the inspection seal, the documentation, and just make business owners responsible. But that requires a different way of thinking in society,” Mr. Roeders said.

“I have so many of these inspectors, for everything and nothing. That’s bureaucracy… but it protects me too.”

Germany has passed numerous bureaucracy alleviation laws, including one taking effect this year which it promises will save 944 million euros through measures like digitalizing tax notices and reducing the length of time businesses must keep receipts to eight years from 10.

The CDU’s manifesto proposed annual laws to reduce reporting requirements and freeing small- and medium-sized firms from the obligation to appoint inspectors.

It also wants to scrap Germany’s supply chain law, which requires companies with over a thousand staff to report on how they are preventing human rights and environmental risks in their supply chain. This regulation often ends up falling to their smaller suppliers to explain, and duplicates a similar EU-wide law.

Germany’s Greens and Social Democrats, as well as NGOs, have expressed concern that loosening such reporting requirements will reduce corporate accountability and reverse hard-fought gains in sustainability.

But businesses say a simpler system is sorely needed.

“We haven’t found anything out that we didn’t already know,” said Philip Roehrig, COO of auto sector supplier ABICOR Group, whose bigger clients are subject to the supply chain law and give his company long forms to fill out.

“The added value for me is zero.” — Reuters

AHMEDABAD — Hundreds of roofs in the informal settlements of India’s western Gujarat state have been painted in a reflective, white coating over the last two months to try to keep their occupants cooler as the hottest time of year approaches.

The effort, which involves 400 households in Ahmedabad, is part of a global scientific trial to study how indoor heat impacts people’s health and economic outcomes in developing countries — and how “cool roofs” might help.

“Traditionally, home is where people have come to find shelter and respite against external elements,” said Aditi Bunker, an epidemiologist at the University of Heidelberg in Switzerland who is leading the project, supported by the UK-based Wellcome Trust.

“Now, we’re in this position where people are living in precarious housing conditions, where the thing that was supposed to be protecting them is actually increasing their exposure to heat.”

As climate change has made India’s summers more extreme, Ahmedabad has suffered temperatures in excess of 46 C (115 F) in recent years.

In the Vanzara Vas slum in the Narol area of the city, which has more than 2,000 dwellings, most of them airless, one-room homes, residents that are part of the project, such as Nehal Vijaybhai Bhil, say they have already noticed a difference.

“My refrigerator doesn’t heat up any more and the house feels cooler. I sleep so much better and my electricity bill is down,” said Bhil, whose roof was painted in January.

Across the world, heatwaves that, prior to the industrial revolution, had a one-in-10 chance of occurring in any given year are nearly three times as likely, according to a 2022 study in the journal Environmental Research Letters.

By painting roofs with a white coating that contains highly reflective pigments such as titanium dioxide, Mr. Bunker and her team are sending more of the sun’s radiation back to the atmosphere and preventing it from being absorbed.

“In a lot of these low socioeconomic homes, there’s nothing to stop the heat transfer coming down — there’s no insulation barrier from the roof,” Mr. Bunker said.

Before joining Ms. Bunker’s experiment, Arti Chunara said she would cover her roof with plastic sheets and spread grass over them.

Some days, she and her family sat outside for most of the day, going into the house only for two to three hours when the heat was bearable.

The trial in Ahmedabad will run for one year, and scientists will collect health and indoor environment data from residents living under a cool roof — and from those who do not.

Other study sites are in Burkina Faso, Mexico and the island of Niue in the South Pacific, spanning a variety of building materials and climates.

Early results from the Burkina Faso trial, Ms. Bunker said, show that cool roofs reduced indoor temperature by between 1.2 C in tin- and mud-roofed homes, and 1.7 C in tin-roofed homes over two years, which subsequently lowered residents’ heart rates. — Reuters

HONG KONG — Several of China’s top universities have announced plans to expand their undergraduate enrolment to prioritize what they called “national strategic needs” and develop talent in areas such as artificial intelligence (AI).

The announcements come after Chinese universities launched artificial intelligence courses in February based on AI startup DeepSeek which has garnered widespread attention.

Its creation of AI models comparable to the most advanced in the United States, but built at a fraction of the cost, has been described as a “Sputnik moment” for China.

Analysts say that DeepSeek’s success, almost entirely staffed by researchers from elite domestic universities, highlights how Beijing’s investment in building a large homegrown STEM talent pool and recent US restrictions on Chinese student visas have allowed China to catch up on AI.

Peking University said on Saturday that it would add 150 undergraduate spots in 2025 to focus on areas of “national strategic importance,” fundamental disciplines and “emerging frontier fields.”

They would mainly be in information science and technology, engineering and clinical medicine.

Renmin University said on Saturday that it would add more than 100 places in areas such as AI to improve innovation.

The expansion is “closely linked” to the plan to make China a “powerful education country” and focus on growing talent in the digital era, it said.

Shanghai Jiao Tong University will add 150 spots focusing on “cutting-edge technologies” and emerging industries “urgently needed,” in AI, integrated circuits, biomedicine, healthcare and new energy.

China in January issued its first national action plan to build a “strong education nation” by 2035, to help coordinate its education development, improve efficiencies in innovation and build a “strong country.”

In December education authorities said they would begin AI education in primary and secondary schools to cultivate creativity, scientific interest and digital skills among students. — Reuters